All Forum Posts by: Chris Majors

@Brandon Gee I've never bought a multi-family and lived in one of the units.  By the time I started investing in RE I already had owned single family.  I have however kept a couple single families that I've lived in as rentals instead of selling.  It's another good strategy to have more favorable financing for rental property because lenders will give you better terms as an owner occupant versus an investor.

Don't sweat the deposit if they never paid it.  Just make sure you get it in writing that they never paid a deposit.  

Some landlords do not require a security deposit.  If the numbers make sense to purchase the property, they should make sense without a security deposit.  Inspect the units and make sure you know what you're buying and satisfied with the condition.  

Grats on the savings and mindset!  If you are currently renting, a great strategy would be to buy a small multi-family (1-4 units) with a low down-payment loan, live in one unit, and rent the rest.  In most markets this will allow you to save most if not all the rent money you would be spending to someone else and cut your teeth as a landlord.  Get something that needs updates, but is in "livable" condition to qualify for financing.  If it needs updates you can do those slowly to increase rents and property value.  

Even though flipping houses is more glamorous and you can potentially make money quick in big chunks, rental real estate is the path to growing wealth.  The IRS encourages us to be long term investors, particularly in rentals, and discourages quick flips with the way we are taxed.  

Sounds like you're on the right track, grats!  My 2 cents: find a local investor that is killing it and that you want to emulate.  Then ask that person if you can work for them for free.  You want to add value to their operation while learning all you can.  Hopefully you find a deal yourself and ask that investor to partner with you.  Grow from there.  

This isn't new or special advice, but what I truly believe works.  

ZILLOW!!  It's free and syncs to most big rental websites.  You can also have the prospects apply through the site so you don't have deal with the prospects' personal information or app fees until you have one that meets your criteria.

If I post a decent rental, I typically have 20-30 apps within a few short days.  It's that easy!  Don't even put a sign out, just post it on Zillow and start getting leads.  I know my comment sounds like I get compensation from them, but I'm just sharing my personal experience.  No compensation, promise.

I also have several Section 8 rentals and only put them on gosection8.com.  It's pretty much the same situation except 10x! 

A house listing in "pre-foreclosure" is a VERY weak lead..  Go to auction.com and find them all day at great prices.  That doesn't mean you can actually buy them.  An agent is NOT going to be able to help you with that process either unless they will go through all of the legwork of contacting the seller and negotiating a deal on your behalf.  I honestly don't see that happening unless you pay them a healthy retainer.  Dealing with pre-foreclosure sellers is a tough gig as a principal, I def wouldn't do it for a client.

There will likely be some heated competition, but I recommend knocking on the sellers' doors or calling/texting them and asking if they want to sell the home to you.  Don't tell them you know they're getting foreclosed on, just try and start a conversation.  Most will be pissy and tell you they're not interested.  You may get lucky... 

Hey @Cassandra Weesies

I'm always shopping at HD. One huge way to save money as a REI is to get hooked up with a pro account. If you have a large order they can run it through the "bid room" and save you money.

For paint specifically, you should get become a REIA member. They will automatically set you up as a "gold" member and you will save 20% on all paint purchases! If you're not a REIA member, you have to scale up buy purchasing a certain quantity of paint to get the discounts.

As far as paint to buy at HD for my rentals, I'm a huge fan of PPG Timeless Eggshell, paint color: Sherwin Williams "Agreeable Gray."  It's a "greige" color that goes with pretty much anything.  When doing turns for rentals you can do a color change in one coat.  The paint is thick and covers grease stains as well.  It holds up well to abuse/washes better than most paints at its price point.  

Most Behr brands are pretty good, particularly their masonry paint for the price.  I've experimented with most brands HD offers.  I really like the PPG Timeless because of the ability to do a one coat color change and it seems to lay down nicely without flashing. 

Good luck with the new rental!

I agree @Tchaka Owen!

My main business is flipping, but I’m also a realtor.  I ALWAYS offer at least 3% commission for my coop.  

Like I mentioned in my post, 3% is more than fair to hand-hold buyers through the process.   That said, if OP wants to be as cheap as possible he could prob get by with 2.5%.  I’ve had to grin and bear it making 2%-2.5% coop in the past, but it does make you salty AND that buyer agent is more likely to recommend the competition.  WHY? More money and you deal with a professional instead of dealing with both sides.  FSBOs suck and most agents steer their folks away when they can.

I guess the main theme here is that you need to pay people right for the work they do.. there really are no short cuts.

Throw it on Zillow and offer buyer agents a 2.5% or 3% commission.  Don't forget to pay a professional photographer to take great pictures.  Hopefully a good agent that knows what they are doing will sell it for you and deal with the hard parts of the sales process.

Honestly, unless you have done SEVERAL real estate transactions yourself, know all the active, pending, and recent closed sales, knowledgeable with real estate financing and which lenders to use, know how to speak to appraisers, and are an expert negotiator, you are shooting yourself in the foot by not hiring a realtor.  It's one thing to come to an agreement with a retail buyer, but getting from contract to close is quite a process.  Dealing with retail buyer is ALWAYS emotional and they NEED an advocate to hold their hand through the process.

I DO agree that listing agents get paid VERY WELL for what they do, but a good one will net you more money on the back-end than their fee.  A buyer's agent almost always earns their 3%!  Representing buyers is labor intensive!

If you're not selling to a retail buyer it's a little easier dealing with cash buyers, but you will almost always net more money by throwing it on the MLS because if it's a real deal there will be multiple offers.

I did a refinance on my primary with these guys about a year and a half ago.  There is nothing "rocket" about their process..  

Full disclosure, it IS more difficult to do a conventional financing with self-employed folks, particularly when you have a bunch of "creative" real estate stuff going on, but these folks were EXTREMELY aggravating to deal with.  They repeatedly requested the same documentation and different people would call to ask the SAME questions.

After I complained I finally received good service and it closed quickly after that, but only after a few months of hair pulling.

I agree with the previous comments to deal with a great local lender.  I suppose if you have a really simple balance sheet with W2 income they can be convenient to deal with because they will send an atty to close at your home or business and everything can be done remotely..